Look, explanations of complex stuff that happened is basically what historians do. The fact of the matter is, the EIC policies led to an enormous rebellion that ultimately resulted in the Crown taking over in India, and the EIC ending its independent existence.

I suspect we should not use "fact of the matter" to describe counterfactual claims. You know how hard the problem of inferring causal knowledge from statistical data is, and specifically, how difficult it is to differentiate between different counterfactual hypotheses. (A says that a plan will fail because it is insufficiently yellow, B says that the plan will fail because it is insufficiently purple. When the plan fails, who do you update towards?)

And even this is highly suffused by interpretation--enormous rebellions are common against governments during this time period, and the implication is that the rebels won, because the EIC lost, which isn't correct. The EIC forces were 80% Indian, and I can't easily find numbers, but it seems likely that more Indians fought on the side of the EIC than on the side of the mutineers.

The EIC policies were terrible and very heavy handed, here is one example:

One example... where the British government continued to use similar policy for 90 years? This is pretty terrible evidence for the EIC being worse than the British government, and that you put this forward to support your claim suggests to me you might want to approach this a bit more carefully.

(If you want to argue that governance in general is terrible and heavy handed, we have a case, but to argue that the EIC is bad by the standards of Indian governance seems to me fairly mistaken.)

I am not sure in what sense it can be said that the EIC used a 'light touch' in India, unless that phrase can mean basically anything you want it to mean.

In this specific instance, I mean that they recruited from the highest caste of the natives and respected their superstitions, instead of recruiting soldiers who already shared their values or would be more pliable.

More broadly, I share Napier's views on the EIC and Indian cultural practices.

The Dutch EIC in Indonesia was much better (but then the Dutch were much better about free trade than the English. The Dutch idea was always to be super efficient about maritime trade and thereby drive others out of a market, the English idea was always to let things run and put tariffs on them. That sounds like a 'light touch' policy, but in fact this always got them into trouble, see also the Molasses Act.)

I have grown less impressed by these sorts of comparisons since reading Albion's Seed. because there's pretty good evidence that people move to places where their strategies will work. American colonists varied widely in their approaches to the Indians, for example, but picked places where their preferred strategy would work. Those who wanted peaceful interaction with Indians settled near peaceful tribes (as determined by their relationships with other Indian tribes) and those who were not opposed to fighting Indians for land settled near aggressive tribes (again, as determined by their relationships with other Indian tribes). It seems highly likely that the Dutch sought out the lands where they expected their approach to work best, and likewise for the British.